The Business Plan for Your Home Health Agency 125aday.com Publishing

Transcription

The Business Plan For Your Home Health Agency
The Business Plan for Your
Home Health Agency
125aday.com Publishing
Copyright ©2004, 125aday.com Publishing, Inc. All rights reserved. No part of this
book may be reproduced or transmitted without written permission from
125aday.com Publishing, Inc.
© Copyright 2004 125aday.com All Rights Reserved
Page 1 of 96
Excel Spreadsheet – IMPORTANT
If you have not already done so, you need to
access and download your Excel Spreadsheet!
You can access your Excel Spreadsheet by
clicking on this link:
http://www.125aDay.Com/Download.cfm?ID=%23%23%207%25%0A
Business Plan Support is Available for
Your Home Health Agency Business
Plan!
The first step in starting and operating a successful home health
agency is developing a successful business plan.
The Business Plan Support Group (BPSG) is a dedicated support
service offered by 125aday.com Publishing, Inc. The BPSG is ready to
assist you as you write your business plan. The BPSG can assist you
with the entire business plan or just the more complex parts of your
business plan. The BPSG can develop and write your business plan for
you and provide other services to design and implement your business
strategy.
To view the detailed information about the Business Plan Support
Group, click here or email us with any question you might have to
BPSG-bdc@125aday.com.
The Business Plan
For Your
Home Health Care Agency
Table of Contents
Introduction to Your Home Health Care Agency Business Plan
8
Page 2 of 96
Customizing the Home Health Care Agency Business Plan
Changing the Page Setup
The Page Tab
Orientation
Paper Size
Print Preview
The Margins Tab
The Header/Footer Tab
Changing the Header
Changing the Footer
The Sheet Tab
Print Area
Print Titles
Print Instructions for:
Gridlines
Row & Column Headings
Comments
Page Order
Changing the Font and Font Size
Changing the Color of the Text
Adding or Removing Worksheets
Renaming the Tabs in the Worksheets
Adding or Removing Rows or Columns
Inserting Pictures
Changing the Formulas
Other Functions
9
9
9
9
10
10
10
10
10
10
10
10
10
10
10
10
10
11
11
11
11
11
11
12
12
12
Step One of the Home Health Care Agency Business Plan
12
Your Personal Evaluation
Your Net Worth
Instructions on How to Complete the Excel Spreadsheets
Your Personal Budget
Why This Information Is Important
12
12
12
13
13
Step Two of the Home Health Care Agency Business Plan
14
The Home Health Care Agency Business Plan Business Plan Cover Sheet 14
Elements of the Cover Sheet
14
First Impression!
14
Complete the Cover Sheet Section in the Excel® Spreadsheet
15
Saving Your Home Health Care Agency Business Plan File
15
When You Have Completed the Cover Sheet
15
Step Three of the Home Health Care Agency Business Plan
17
The Home Health Care Agency Business Plan Executive Summary
The Basics of the Executive Summary
If You Will Be Applying for Loans or Investors
What Information Should Be Included in the Executive Summary?
Questions to Address
Mistakes to Avoid
Mission Statement
Examples
Your Mission Statement for Your Home Health Care Agency
The Basics of the Mission Statement
17
17
17
17
18
19
20
20
20
20
Page 3 of 96
Mistakes to Avoid
Products and Services for Your Home Health Care Agency
Definition of Your Home Health Care Agency Products and Services
Complete the Executive Summary Section in the Excel® Spreadsheet
When You Have Completed the Executive Summary
Step Four of the Home Health Care Agency Business Plan
21
21
22
22
22
24
General Company Description for the Home Health Care Agency Business
Plan
24
Company Description: Business Plan Basics
24
Company Description: Mistakes to Avoid
25
Company Goals and Objectives for Your Home Health Care Agency
25
Business Philosophy
26
Legal Form of Ownership
26
Complete the General Company Description Section in the Excel® Spreadsheet
27
When You Have Completed the Company Goals and Objectives
27
Step Five of the Home Health Care Agency Business Plan
Product and Services List
Services
Home Health Care
Managed Care Services
Orthopedic Services
Skilled Nursing Care
Speech Therapy
Home Health Aides
Home Infusion Therapy
Medical/Social Services
Respiratory Therapy
Physical Therapy
Medical Supplies
Occupational Therapy
Nutritional Counseling
Patient Teaching
Home Assessment
Personal Care Aid
Pediatric Services
Family Support Services
Diabetes Education
Asthma Education
Women's Health
Disease Management Programs
Asthma
Congestive Heart Failure
Wound-Ostomy Care
Stroke
Payment Methods
Medicare
Medicaid
Private Insurance Plans
Veterans Administration
Personal Pay
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
29
30
30
30
Page 4 of 96
Health Maintenance Organization (HMO)
Managed Care Organization (MCO)
30
30
Products and Services of Your Home Health Care Agency
How to Describe In Depth Your Product and Services
Competitive Advantages or Disadvantages
Pricing, Fee or Leasing Structures
Product & Service Description: Business Plan Basics
Product & Service Description: Mistakes to Avoid
Complete the Products and Services Section in the Excel® Spreadsheet
When You Have Completed the Products and Services
Step Six of the Home Health Care Agency Business Plan
35
Start Up Costs and Capitalization for your Home Health Care Agency
Qualified and Non-Qualified Start-Up Costs
Qualified Start-Up Costs
Non-Qualified Start-Up Costs
Budget Allowances
Evaluating Start-Up Costs
Start-Up To Do List
The Excel Spreadsheet
Instructions on How to Complete this Section in the Excel® Spreadsheet
Complete the Start Up Costs Section in the Excel® Spreadsheet
When You Have Completed the Start Up Costs and Capitalization
Step Seven of the Home Health Care Agency Business Plan
The Marketing Plan
Marketing & Sales: Business Plan Basics
Marketing & Sales: Mistakes to Avoid
Target Market: Business Plan Basics
Target Market: Mistakes to Avoid
Market Research Basics
Market Research - Why?
Market Research - How?
Primary Market Research
Secondary Market Research
The Economics of the Home Health Care Agency Industry
Product
Features and Benefits
Customers
Competition
Niche Market
Marketing Strategy
Promotion
Promotional Budget
Pricing
Proposed Location
Distribution Channels
Complete the Marketing Plan Section in the Excel® Spreadsheet
When You Have Completed the Marketing Plan
Step Eight of the Home Health Care Agency Business Plan
Sales Forecast
30
30
30
30
30
31
31
32
35
35
35
35
35
36
37
38
39
39
39
41
41
41
42
43
44
45
45
45
45
46
46
47
47
48
48
49
49
49
49
50
50
51
51
51
54
54
Page 5 of 96
Financial Projections: Business Plan Basics
Sales Forecast for Your Home Health Care Agency
Complete the Sales Forecast Section in the Excel® Spreadsheet
When You Have Completed the Sales Forecast
Step Nine of the Home Health Care Agency Business Plan
The Operational Plan for Your Home Health Care Agency
Operational Plan: Business Plan Basics
Operational Plan: Mistakes to Avoid
The Operational Plan
Production
Location
Physical Requirements
Access
Construction
Cost
Legal Environment
Personnel
Inventory
Suppliers
Credit Policies
Managing your Accounts Receivable
Managing your Accounts Payable
Complete the Operational Plan Section in the Excel® Spreadsheet
When You Have Completed the Operational Plan
Step Ten of the Home Health Care Agency Business Plan
54
55
55
55
55
56
57
57
57
58
59
59
60
60
60
60
60
60
61
61
62
62
62
63
63
64
66
Management and Organization of Your Home Health Care Agency
66
Management Team: Business Plan Basics
66
Management Team: Mistakes to Avoid
68
Professional and Advisory Support for Your Home Health Care Agency
68
Complete the Management and Organization Section in the Excel® Spreadsheet
68
When You Have Completed the Management and Organization
68
Step Eleven of the Home Health Care Agency Business Plan
71
The Financial Plan
Financial Projections: Mistakes to Avoid
71
71
72
The Financial Plan for Your Home Health Care Agency
Twelve Month Profit and Loss Projection
Projected Cash Flow
Opening Day Balance Sheet
Breakeven Analysis
When You Have Completed the Financial Plan
73
73
73
74
74
75
76
76
76
76
Appendixes
79
Page 6 of 96
Your Home Health Care Agency Business Plan Is Now Complete and Ready
for Printing
79
In Conclusion
80
Attachment One
81
A General Discussion of Basic Legal Forms of Ownership
Proprietorship, Partnership or Incorporation?
Advantages and Disadvantages of Proprietorship
Advantages
Disadvantages
Advantages and Disadvantages of Partnership
Advantages
Disadvantages
Advantages and Disadvantages of Incorporating
Advantages
Disadvantages
Registering a Proprietorship or Partnership
Registering a Corporation
Incorporating a Company in your State
Attachment Two
Information Recourses
U.S. Small Business Administration (SBA)
Service Corps of Retired Executives (SCORE)
Small Business Development Centers (SBDCs)
Small Business Institutes (SBIs)
SBA Business Development Programs
Other U.S. Government Resources
Federal Publications
Consumer Information Center (CIC)
Consumer Product Safety Commission (CPSC)
U.S. Department of Agriculture (USDA)
U.S. Department of Commerce (DOC)
U.S. Department of Health and Human Services (HHS)
U.S. Department of Labor (DOL)
Internal Revenue Service (IRS)
U.S. Environmental Protection Agency (EPA)
U.S. Food and Drug Administration (FDA)
For More Information
81
81
81
82
82
82
83
83
83
84
84
84
84
85
86
86
86
87
87
87
87
87
88
88
88
88
88
89
89
89
89
90
90
Government and State Websites
91
Disclaimer and Limit of Liability
94
Page 7 of 96
Introduction to Your Home Health Care Agency Business Plan
There are few very secrets and absolutely no short cuts to preparing a
Business Plan for a home health care agency. Careful investigation,
complete research, and a through thought process is required to
complete an accurate Business Plan for a home health care agency.
This Business Plan for a home health care agency is carefully
structured to take you a step at a time. In order to complete the
Home Health Care Agency Business Plan accurately, you should take
each step, in order, and then move on to the next step.
You do not have to complete the entire Home Health Care Agency
Business Plan at once. We do suggest that you complete each step
before leaving your work.
Two notes before we move on to preparing the Home Health Agency
Business Plan. The first note for you to consider is that this Business
Plan for a home health agency is complimented with How to Start
Your Own Business!, which is available on our website,
www.125aday.com, and can be immediately accessed by clicking on
the following link:
http://www.125aday.com/ProductDetail.cfm?ID=1
We strongly urge you considering buying How to Start Your Own
Business! to learn more about how to start your home health agency.
The second note is a comment about getting your customers and
clients. If you have a great deal of experience in the field of working
and operating a home health agency, you might already know how you
plan to get these customers and clients for your home health agency
business. If you don’t already know exactly how you will get your
customers and clients, we offer a great program on our website
entitled the 125aday.com New Customer Development Program.
We highly suggest that you get this valuable business tool and you can
view this product at the link below:
http://www.125aday.com/ProductDetail.cfm?ID=91
Let’s get started on your Home Health Care Agency Business Plan.
The Home Health Care Agency Business Plan is divided into Eleven
(11) steps. These steps are:
Page 8 of 96
Step One – Your Personal Evaluation
Step Two – The Business Plan Cover Sheet
Step Three – The Executive Summary
Step Four – General Company Description
Step Five – Products and Services
Step Six – Start Up Costs
Step Seven - The Marketing Plan
Step Eight – Sales Forecasts
Step Nine – The Operational Budget
Step Ten - Management and Organization
Step Eleven – The Financial Plan
Appendixes
Your Home Health Care Agency Business Plan Is Now Complete and
Ready for Printing
In Conclusion
Customizing the Home Health Care Agency Business Plan
You can customize the Home Health Care Agency Business Plan and
how it looks when viewed on the computer and when the Business
Plan is printed. Here we explain some of the basics of customizing the
Excel® spreadsheet.
Excel Spreadsheet – IMPORTANT
If you have not already done so, you need to
access and download your Excel Spreadsheet!
You can access your Excel Spreadsheet by
clicking on this link:
http://www.125aDay.Com/Download.cfm?ID=%23%23%207%25%0A
Changing the Page Setup
The Page Tab
Orientation
Here you can select to view and print your Home Health Care Agency
Business Plan in portrait (vertical) or landscape (horizontal) format.
The default setting is portrait.
Page 9 of 96
Paper Size
Here you can select to and view print in letter, legal or custom paper
sizes. The default setting is letter.
Print Preview
Here you can select to print the Home Health Care Agency Business
Plan from the back to the front, or vice versa. The default setting is
back to front.
The Margins Tab
Here you can select the margins for your Home Health Care Agency
Business Plan. The default settings are the recommended settings.
The Header/Footer Tab
Changing the Header
Click on the Custom Header button and you can customize the header
for your Home Health Care Agency Business Plan. Also notice that you
can select a print preview from this screen that allows you to see the
entire page, with headers and footers.
After changing the header, click OK to save your changes.
Changing the Footer
Click on the Custom Footer button and you can customize the header
for your Home Health Care Agency Business Plan.
After changing the footer, click OK to save your changes.
The Sheet Tab
Here you can adjust and set the:
Print Area
Print Titles
Print Instructions for:
Gridlines
Row & Column Headings
Comments
Page 10 of 96
Page Order
Changing the Font and Font Size
You can select the entire worksheet or specific text to assign font and
font size to in the workbook and make your changes on the toolbar.
You can have different size fonts on the same page. The default font
is Verdana and the font size, for the most part, 12.
Changing the Color of the Text
You can select the entire worksheet or specific text to assign font and
font size to in the workbook and make your changes on the toolbar.
You can have many different colors on the same page. The default
color is the color that is on the worksheets now.
Adding or Removing Worksheets
You can add worksheets by clicking on Insert, Worksheet. You will
want to click on the tab next to the area where you want to insert the
worksheet.
You can delete a worksheet by clicking on Edit, Delete Sheet. But
WARNING: if you delete a sheet with formulas that extend to other
worksheets, you will receive errors in the formulas. So be sure you
want to delete the worksheet!
Renaming the Tabs in the Worksheets
Select the tab you want to rename. Right click on the tab and select
Rename. Name the tab as you like, but there is a character limit.
Adding or Removing Rows or Columns
You can rows or columns by selecting where you want to add the row
or column. Then select Insert, then row or column.
You can remove an entire row by clicking on the row number (far left)
and selecting Edit, delete.
You can remove an entire column by click on the column and selecting
Edit, delete.
Page 11 of 96
Inserting Pictures
You can insert pictures from your computer into the Home Health Care
Agency Business Plan by selecting the cell where you want the picture
to be inserted. Then select Insert, Picture and browse to the picture
you want to insert. Double click the picture and then format the cell.
Changing the Formulas
Changing or adding formulas is not extremely difficult in Excel®.
However, it does require a working knowledge of the formulas. You
can search help to learn how to perform any formula that you want to
use.
Other Functions
There is a wide variety of things that you can do to the workbook to
make it appear the way that you want it to look. There are too many
for us to go into here in this document. To get assistance on any
function you want to add or change, you can always select Help and
get the answers you need.
Step One of the Home Health Care Agency Business
Plan
Your Personal Evaluation
Your Net Worth
Before starting your new home health care agency, you need to have a
firm grasp on your own personal financial situation. For that reason,
the first step in preparing your Home Health Care Agency Business
Plan will be to determine your personal financial picture.
Refer to your Excel® Spreadsheet. The first page is entitled Step 1 Your Net Worth.
Note
You will notice that the columns are labeled with letters (A, B,
C, etc) and the rows are numbered. As we go through
spreadsheets, we will refer to the column letter and the row
number. The column letter is across the top of the
Page 12 of 96
spreadsheet. The row number is along the right hand side of
the spreadsheet. . Each individual block in the spreadsheet is
called a cell.
Note
While we have attempted to include everything necessary in
these spreadsheets, if you add rows to the spreadsheets, the
totals may not add up! You will need to adjust the formulas to
add up the figures if you add rows. While this is not difficult,
you will need to ensure that you can adjust the totals so the
figures will be correct. You can also change the text colors,
fonts, and sizes of the fonts as you work.
In viewing the first page of the Excel® spreadsheet entitled Step 1 Your Net Worth, you will find that this information is very
commonplace, so a detailed discussion is unnecessary. Just fill in the
blanks and get the Estimated Net Worth at the bottom of the section.
The areas in the light blue color automatically fill themselves in, so do
not enter any figures in these cells. Hopefully, this will be a positive
number.
Refer to your Excel® Spreadsheet, Step 1 – Your Net Worth and scroll
down to the section entitled Your Personal Budget.
Again, this information is commonplace and you should know what
dollar amounts to enter into the cells. For instance, in Column C, Row
5, this is monthly mortgage. If you monthly payments are $1,500.00,
enter 1500 in Column D, Row 5.
You will see that this Personal Budget is for 1 month, 3 months, 6
months, and 1 year. You should also notice that as you enter your
monthly mortgage payment, the spreadsheet automatically totals the
rest of the row. So you only need to enter the monthly amounts to
get the 3 and 6 months totals and the yearly total.
Why This Information Is Important
In starting your home health care agency, you need to have your
personal financial situation firmly planted on the ground. Starting a
home health care agency is difficult enough without personal financial
problems getting in the way of your success.
Page 13 of 96
If the Total Income Needed (Column D, Row 38) is greater than your
Total Income (Column D, Row 36), you have some financial issues to
fix before starting your home health care agency. We can’t tell you
how to fix this problem, but we can tell you that your will be starting
your home health care agency in financial trouble and that is no way
to start a business!
Now, assuming that your personal financial situation is acceptable, you
are ready now to begin your Home Health Care Agency Business Plan.
Step Two of the Home Health Care Agency Business
Plan
The Home Health Care Agency Business Plan Cover Sheet
Note
In this Home Health Care Agency Business Plan, we have
provided sample pages of the from the Excel® spreadsheet so
you can easily scroll down to that section in this document as
we are discussing it.
The Cover Sheet (see an example here by clicking on this link: Cover
Sheet) is the first page of your Home Health Care Agency Business
Plan.
Elements of the Cover Sheet
First Impression!
The cover of the document is often the "First Impression" of your
home health care agency business for any interested parties or
investors. The purpose of a cover is to tell the reader what the
document is about. Your cover should say the words "The Business
Plan for the name of your Home Health Care Agency" and should
include:
1)
2)
3)
4)
5)
Name and business name
Company logo
Address
Telephone number
Fax number
Page 14 of 96
6) E-mail address
7) Other contact information
The cover should be attractive and professional looking. Fonts used
should be easily read, and color contrasts should be pleasant to the
eye.
The information is very basic.
Complete the Cover Sheet Section in the Excel® Spreadsheet
Go to the Excel® Spreadsheet to the tab labeled Step 2 – Cover
Sheet. Fill in the information and save your work.
Saving Your Home Health Care Agency Business Plan File
As you complete the Steps in this Home Health Care Agency Business
Plan, be sure to save your work often.
When You Have Completed the Cover Sheet
When you have completed the Cover Sheet, you are ready for the next
step in the preparation of your Home Health Care Agency Business
Plan. So proceed to Step Three, the Executive Summary.
Note
You can change the Header/Footer of the Excel® documents to
use in your Home Health Care Agency Business Plan.
Page 15 of 96
The Business Plan
For
The Name of Your Home Health Care Agency
Owner Information
Business name:
Address:
Address Line 1
Address Line 2
City, ST 22222
Telephone: 222-333-4444
Fax:
111-222-3333
Email:
xyz@example.com
This Business Plan is for Informational Purposes Only.
Page 16 of 96
Step Three of the Home Health Care Agency Business
Plan
The Home Health Care Agency Business Plan Executive
Summary
The Basics of the Executive Summary
The Executive Summary (see an example here by clicking on the
following line: Executive Summary) is a narrative and should be one to
two pages in length. We certainly suggest you make it two pages or
less, especially if investors or bankers will be reviewing your Business
Plan for your home health care agency for loan or investment
purposes.
You should explain the fundamentals of your home health care agency:
1. What will your products and services will be,
2. Who will be your customers
3. Who are the owners of your home health care agency, and
4. What you think the future holds for your home health care agency
and the industry.
You should make this narrative enthusiastic, professional, complete and
concise without overstating the financial figures.
If You Will Be Applying For Loans or Investors
If you will be applying for a loan or looking for investors, state clearly
how much you want, precisely how you are going to use it, and how
the loan or investment will make your home health care agency more
profitable and successful, thereby ensuring repayment.
Note
If you are going to use your Home Health Care Agency Business
Plan for applying for loans and especially if you are going to be
looking for investors, make sure that your Home Health Care
Agency Business Plan meets any requirements as it can be
construed as a Securities Offer. We suggest that you consult
with your attorney before doing this.
What Information Should Be Included in the Executive
Summary?
Page 17 of 96
The following are commonly used sub-headings to cover the key
points. Avoid general statements and be sure to clearly articulate key
numbers.
•
•
•
•
•
•
•
•
The Company
Mission statement
Management
The Opportunity
Products & Markets
Sales and Profit Summary
Funding Requirement
Investment Proposal
Regardless of how you organize your Executive Summary, be sure to
answer the following questions (note - due to the sensitive,
confidential nature of what you might say in such a document, you
might want to restrict your disclosure in certain areas and only reveal
such information to others if you are assured of confidentiality). You
should address these questions, and any others which you consider
important, under headings such as those noted above.
Questions to Address:
1. What is the full, legal name (and jurisdiction of incorporation) of
your home health care agency (if it exists) and a brief history
(when incorporated, ownership and capital structure, track
record, accomplishments to date if any, etc)? Don't forget to
include a complete address and contact details (email address,
telephone numbers, etc).
2. What is the "Mission" of your home health care agency (i.e. what
is it setting out to achieve or accomplish)?
3. What is the market which your home health care agency is going
after (who, where, size -in dollars) and what is the unique (i.e.
proprietary advantage in the form of patents, trade secrets,
trademarks) or new product or service which is being offered to
this home health care agency market? A comment on
competition is useful. Also, identify and current and potential
customers. Testimonials are helpful.
4. Who are the key people behind your home health care agency
(i.e. why would someone entrust them with their money?) and
what are their credentials? Include all board members and key
management people.
5. What does your home health care agency expect to achieve in
sales and profit (before tax) (in $) in years 1, 2, 3 and beyond?
Page 18 of 96
6. How much capital is needed (at various stages over the first 3
years)? And what are the uses to which these funds will be
applied?
7. What has already been invested (# of years sweat equity, or
seed investment amounts, i.e.#shares@$xx, and by whom)?
8. What is being offered for the investment (e.g. equity %, board
seat, etc.)
9. What kind of return might an investor expect? Over what time
frame? And what is the "exit strategy"?
10.
What else is important to note? (that hasn't been covered
elsewhere)
Executive Summary: Mistakes to Avoid
Here are several common mistakes that can make your Executive
Summary less effective:
•
•
•
•
•
•
Lacking a specific focus
Too long and wordy, and failing to get to the point
Trying to be all inclusive (it should be a powerful summary)
Failing to demonstrate a special or unique opportunity
Failing to outline the terms of the investment sought
Failing to generate enthusiasm in the reader
Some suggestions to combat these problems:
•
•
•
•
•
•
•
Limit your Executive Summary to a maximum of 3 pages (at the
very most)
If possible, attempt to present your Executive Summary on 1 or
2 pages
Focus on the opportunity you are presenting your investor and
explain why it is special
Make certain that the opinions and claims in your Executive
Summary are fully supported in the other sections of your Home
Health Care Agency Business Plan
Attempt to use only concrete facts and figures that explain your
business concept, market niche and financial projections
Don't forget to include the details of your investment (the
amount you need, what you will spend it on, and the return you
offer your investor)
Keep your reader in mind - why are they reading the plan and
what response/action to you hope to generate?
Page 19 of 96
Mission Statement
Many companies have a brief mission statement, usually in thirty words
or less, explaining their reason for being in business and their guiding
principles. Some are very complex.
Examples
California Real Estate Inspection Association (CREIA) has a simple
Mission Statement. You can view that Mission Statement by clicking on
the following link:
http://www.creia.com/mission1/
Sun Microsystems has very complex Mission Statement. You can view
that Mission Statement by clicking on the following link:
http://www.sun.com/aboutsun/coinfo/mission.html
Your Mission Statement for Your Home Health Care Agency
You should carefully think through your own personal Mission
Statement for your home health care agency, also referred to as
Mission and Vision Statements. You might write down whatever comes
to mind now. The good news is that you can change, revised, and
detail your Mission Statement later on, as you should with your entire
Home Health Care Agency Business Plan over the years.
The Basics of the Mission Statement
The Mission and Vision Statements set the tone for not only your
business plan, but also for your company. They define the path your
company will follow and act as a guiding principle by which your
company functions.
Your Mission and Vision Statements tell your reader what you and your
business are all about - what your company stands for, what you
believe in, and what you intend to achieve.
Economy of words is critical. This doesn't necessarily mean that they
should be short at the expense of effectiveness, but that each word
Page 20 of 96
should be powerful and meaningful. Be clear and concise and make it
obvious what your company is attempting to do.
Is there a difference between a mission and vision statement? Yes, the
differences are:
Your VISION defines your long-term dream. It should not be
achievable. That may sound ridiculous, but the objective is for your
vision to always be just slightly out of your reach. It's what you
constantly strive to attain, and it becomes your reason for being.
Your MISSION is what you intend to become or accomplish. It should
be challenging but achievable. A well-written mission statement
demonstrates that you understand your home health care agency
business, have defined your unique focus, and can articulate your
objectives concisely to yourself and others.
Mission & Vision: Mistakes to Avoid
Here are some of the "don'ts" to avoid when writing your Mission
Statement or Vision Statement:
•
•
•
•
•
•
•
Don't regurgitate a description of your business.
Don't make it boring.
Don't make it the length of a Ph.D. thesis.
Don't fake emotion.
If you don't believe it, don't include it.
Don't lie or claim to be something you aren't (i.e. intend to do
exactly what you say you are going to do in your mission
statement).
Don't forget to get the input of everyone on your team.
Products and Services for Your Home Health Care Agency
This is a SUMMARY of the home health care products and services that
you will offer in your home health care agency business. The detailed
home health care products and services section is in Step 5 of this
Business Plan.
Describe each of the home health care products or services you will
offer in your home health care agency business. Go into as much detail
as necessary for the reader to get an understanding for what the
enterprise will be. Make it interesting. It is important to point out how
your home health care agency is different from other home health care
Page 21 of 96
agencys. Just saying "It is better" is not enough. You must tell how it
is better. Every business claims to be "high quality, better service."
While a business must have quality and good service, it is no real
selling point, since the consumer is bombarded with that claim at
every turn. One can not bore a reader into buying their proposal! One
must convince them about their product or service. If it can not be
done here, it won’t be done in the market place when your home
health care agency starts.
Please Note!
Definition of Your Home Health Care Agency Products and
Services
Throughout this business plan, we will be referring to your
home health care agency “product”. This is a general term that
describes all of the retail products that you will sell. It also
refers to the services that you will offer your customers.
Unless we are describing some action that you must take in the
preparation of this business plan in relation to specific products
or services, we will refer to all of the products and services that
you offer in your home health care agency as “product”.
Complete the Executive Summary Section in the Excel®
Spreadsheet
Go to the Excel® Spreadsheet to the tab labeled Step 3 – Executive
Summary. Fill in the information and save your work.
When You Have Completed the Executive Summary
Now you are ready to proceed to the next step in the preparation of
your Home Health Care Agency Business Plan, so proceed to Step
Four, General Company Description.
Page 22 of 96
The Business Plan for the Name of Your Home Health Care Agency
Executive Summary
The Company
Mission statement
Management
The Opportunity
Products & Markets
Sales and Profit Summary
Funding Requirement
Investment Proposal
Page 23 of 96
Step Four of the Home Health Care Agency Business
Plan
General Company Description for the Home Health Care Agency
Business Plan
The General Company Description (you can see an example here by
clicking on the following link: General Company Description) is made
up of the following:
Company Goals and Objectives
Business Philosophy
Company Description: Business Plan Basics
The company description section of your business plan should outline
your company's basic background information and business concept.
Explain in general terms who you are and what you do. It should also
cover the history of your home health care agency, how you reached
this point, and where you intend to go in the future. Consider covering
the following in your company description section:
Legal Description
Include details about where and when the home health care agency
was formed, where and when it was incorporated, a one line
description of what home health care agency business you are in, and
a brief overview of what your home health care agency offers. If the
location of your home health care agency is important, explain the
advantages and benefits to your reader.
History of The Company
Provide a general overview of the history of your home health care
agency business. Organize details of your company into a timeline or
narrative format, and include your achievements and significant
milestones. Explain why you started the home health care agency, the
driving force behind its inception, and how your home health care
product/service mix has changed over time. Include historical data on
sales, profits, individual home health care products and specific home
health care services, number of employees, and other important facts
to build a case for your business.
Page 24 of 96
Current Status
Provide a snapshot of where your home health care agency is today.
Are you in one location, what do you offer to your customers now, how
many employees do you have, and how successful are you? Point out
your current strengths, but also honestly and frankly address your
weaknesses. Investors know all businesses have weak points, and you
demonstrate business maturity by acknowledging your weaknesses
and outlining steps to combat them.
Future Goals
This section gives your reader an idea of where your home health care
agency is heading. What are looking to accomplish over the next 1, 3,
5 and 10 years? Relate these goals to the investment you seek so an
investor understands why you need their money and what you intend
to do with it. Explain the overall approach for reaching growth and
profit goals in optimistic language, but make sure it's realistic. It's
easy to make rosy projections about the future of your home health
care agency, but it's harder to make them believable.
Company Description: Mistakes to Avoid
The company description should clearly explain your home health care
agency and the home health care products or services you offer. This
section could be considered the who, what, why, where, when and how
of your home health care agency, with the focus on significant
highlights of your business. Here are some of the most common
mistakes that we find in the company section:
•
•
•
•
•
Including far too much detailed information about your business
Providing information that an investor would consider your
"personal opinion"
Appearing as though you have no home health care agency
history or business purpose
Leaving out important business and legal particulars
Writing the section in an unorganized or confusing manner
Company Goals and Objectives for Your Home Health Care
Agency
Your goals and objectives for your home health care agency are
destinations; where you want your home health care agency now and in
the future. Objectives are progress markers along the way to measure
goal achievement. For example, a goal might be to have a healthy,
Page 25 of 96
successful company that is a leader in customer service and has a loyal
customer following. Objectives might be annual sales targets and some
specific measures of customer satisfaction.
This particular area of the Home Health Care Agency Business Plan may
be difficult to completely fill out at this time. You might additional
financial data to reasonable determine your goals and objectives.
Nevertheless, you should make some notes in on the page and then
proceed. As we mentioned, you can (and should) come back and revise
and update your Home Health Care Agency Business Plan.
Business Philosophy of Your Home Health Care Agency
This is a description of what is important to you in your business as the
owner and operator of a home health care agency. You will need to
address, in some detail, the following:
1.
2.
3.
4.
5.
6.
7.
To whom will you market your home health care products and
services.
Describe who your target market is.
Describe your home health care agency industry with some
emphasis on the following items:
a. Is the home health care agency business in a growth
industry?
b. What changes do you foresee in your home health care
agency industry, short term and long term?
c. How will your home health care agency be poised to take
advantage of the changes mentioned above?
Your most important company strengths and core
competencies.
What factors will make your home health care agency
succeed?
What do you think your major competitive strengths will be?
What background experience, skills, and strengths do you
personally bring to this new venture?
Legal Form of Ownership for Your Home Health Care Agency
Describe what legal form of ownership you have decided to form for
your home health care agency; Sole Proprietor, Partnership,
Corporation, Limited Liability Corporation (LLC) and describe why you
have selected this form.
Page 26 of 96
If you haven’t determined the legal form of ownership, you certainly
need to discuss with your attorney and/or accountant. We will provide
you some information here about this, but in no way is this information
to be assumed to be legal advice. Only your professional legal and
accounting team can correctly advice you what you should do in this
regard as to the legal form of ownership of your home health care
agency.
For a general discussion on the legal forms of business ownership,
please see Attachment One – A General Discussion.
Complete the General Company Description Section in the
Excel® Spreadsheet
Go to the Excel® Spreadsheet to the tab labeled Step 4 – Gen Co
Description. Fill in the information and save your work.
When You Have Completed the Company Goals And Objectives
your Home Health Care Agency Business Plan, so proceed to Step Five,
Products and Services.
Page 27 of 96
General Company Description
Company Goals and Objectives
Business Philosophy
Page 28 of 96
Step Five of the Home Health Care Agency Business
Plan
Product and Services List
To assist you in preparing your Product and Services list, here are
home health care products or services to consider when deciding on
what your home health care agency will provide to your customers.
Services
Home Health Care
Managed Care Services
Orthopedic Services
Skilled Nursing Care
Speech Therapy
Home Health Aides
Home Infusion Therapy
Medical/Social Services
Respiratory Therapy
Physical Therapy
Medical Supplies
Occupational Therapy
Nutritional Counseling
Patient Teaching
Home Assessment
Personal Care Aid
Pediatric Services
Family Support Services
Diabetes Education
Asthma Education
Women's Health
Disease Management Programs
Asthma
Congestive Heart Failure
Wound-Ostomy Care
Stroke
Payment Methods
Medicare
Medicaid
Page 29 of 96
Private Insurance Plans
Veterans Administration
Personal Pay
Health Maintenance Organization (HMO)
Managed Care Organization (MCO)
Preferred Provider Organization (PPO)
Products and Services of Your Home Health Care Agency
The Product and Services section (you can see an example here by
clicking on the following link: Product and Services) of your Home
Health Care Agency Business Plan will describe in detail the home
health care services you will provide in the course of your operating
your home health care agency and the products that you will sell in the
process.
How to Describe In Depth Your Product and Services
Here, you will describe in depth your home health care agency products
and services. You will need to breakdown your charges. Once again,
as in the future, you will be able to revise this section the more you
learn as you go along in the preparation of the Business Plan for your
home health care agency.
Competitive Advantages or Disadvantages
You will need to list what factors will give you competitive advantages
or disadvantages. For example, the level of quality or unique or
proprietary features you will offer in your home health care agency.
Pricing, Fee or Leasing Structures
You will need to list what are the pricing, fee or leasing structures of
your home health care agency products and services.
If you have any drawings, photos, sales brochures, etc, these can be
shown in your first Appendix, Appendix One. The Appendix’s will be at
the back of your Home Health Care Agency Business Plan, so keep this
in mind when saving your files.
Product & Service Description: Business Plan Basics
Page 30 of 96
The home health care product/service section is one of the most
important parts of your business plan. It's your chance to clearly
explain your home health care products/services, identify their
features and benefits, and discuss what needs or problems they
address in the market.
Product Overview
In explaining each of the home health care products you will offer,
your reader will want to know what it is, what it does, and its features
and benefits. Consider including pictures if they would help your
reader get a better understanding of your home health care product.
Service Overview
In explaining each of the home health care services you will offer, your
reader will want to know what it is, what it does, and its features and
benefits. Consider including pictures if they would help your reader get
a better understanding of your home health care service. Write this
section with enough information to satisfy an outsider's need to
understand your service without boring them with trivial details.
Product & Service Description: Mistakes to Avoid
The following are the some of the most common mistakes we find in
the product and service description section:
•
•
•
•
•
•
•
Failing to identify the benefits of the home health care product or
service (focusing instead on the features)
Describing the product/service in language that is too technical,
with too many industry specific words or phrases
Omitting the specific problem the home health care
product/service addresses and how that problem is solved
Assuming an improved product/service will "sell itself"
Describing the product/service in terms that are too broad
Failing to include a third-party evaluation or analysis of your
home health care product
Underestimating the importance of legally protecting your home
health care product/service
Complete the Products and Services Section in the Excel®
Spreadsheet
Go to the Excel® Spreadsheet to the tab labeled Step 5 – Prod and
Servs. Fill in the information and save your work.
Page 31 of 96
When You Have Completed the Products and Services
Note
If you use Appendix’s, be sure to number them in the actual
order that you use them.
your Home Health Care Agency Business Plan, so proceed to Step Six,
Start Up Costs and Capitalization.
Page 32 of 96
Products and Services
Page 33 of 96
Appendix One
Products and Services Attachments
Page 34 of 96
Step Six of the Home Health Care Agency Business
Plan
Start Up Costs and Capitalization for your Home Health Care
Agency
You will have many expenses before you even begin operating your
home health care agency. It is important to estimate these expenses
accurately, and then to plan where you will get sufficient capital. This
is a research project, and the more thorough your research, the less
chance you will leave out important expenses or underestimate them.
Qualified and Non-Qualified Start-Up Costs
Qualified Start-Up Costs
Start-up costs include costs for the following:
Surveys of potential home health care agency markets.
Analyses of available facilities, labor, supplies, etc.
Advertisements for the opening.
Salaries and wages for employees who are being trained, and
their instructors.
Travel and other necessary costs for securing prospective
distributors, suppliers, or customers.
Salaries and fees for executives and consultants, or for similar
professional services.
Non-Qualified Start-Up Costs
Start-up costs do not include the following.
Deductible interest.
Taxes.
Research and experimental costs.
Budget Allowances
Even with the best of research, however, opening a new home health
care agency has a way of costing more than you anticipate. There are
two ways to make allowances for surprise expenses. The first is to add
a little “padding” to each item in the budget. The problem with that
approach, however, is that it destroys the accuracy of your carefully
Page 35 of 96
thought out plan. The second approach is to add a separate line item,
which we call contingencies, to account for the unforeseeable. This is
the approach we recommend, and you will see a “Contingencies” line in
our spreadsheet.
You should talk to others individuals who have started similar home
health care agency businesses to get a good idea of how much to allow
for contingencies. If you cannot get good information, we recommend
a rule of thumb that contingencies should equal at least 20% of the
total of all other startup expenses.
Evaluating Start-Up Costs
When starting a new business, moving to a new location, opening a
new branch or expanding your business, there will be start-up or onetime expenses. Know what these expenses will be by printing out this
page, print the following page and fill in the amounts of dollars
required for each of the items listed below.
Item
Real Estate, furniture, fixtures,
machinery, equipment:
a) Purchase price - if paid
in full with cash
b) Cash down payment - if
purchased on contract
c) Transportation &
installation costs
Starting Inventory
Decorating, refurbishment, &
remodeling costs
Deposits Required:
a) Utilities
b) Rent
c) Other (identify)
Dollar Cost
$
______________
$
______________
$
______________
$
______________
$
______________
$
______________
$
______________
$
______________
Fees Required:
Page 36 of 96
a) Legal, accounting,
others
b) Licenses, permits, etc.
c) Other (identify)
Initial Advertising & Marketing
Costs (i.e., flyers, sales letters
and calls, signs, brochures, etc.)
Accounts Receivable (_____
days of sales)
Salaries and owners draw until
business enterprise opens or
until cash flow is positive
Other miscellaneous expenses:
Merchant Association fees,
equipment rental, office
supplies, cleaning service,
other supplies, signs, etc.
Payments on other fixed
obligations
Total Start-Up Costs
$
______________
$
______________
$
______________
$
______________
$
______________
$
______________
$
______________
$
______________
$
______________
Start-Up To Do List
This is a general checklist for any new start up business venture.
_____ 1.
_____ 2.
_____ 3.
_____ 4.
_____ 5.
Know what type of business you would like to start
and learn all you can about it.
Appraise your business strengths and weaknesses. Be
strict and objective.
Conduct thorough research of potential customers,
your trade or industry, your competition, your
licensing and tax requirements, location, and name.
Determine type of business organization (i.e.
Proprietorship, Partnership, or Corporation)
Evaluate possible site locations. Check physical
condition, suitability, traffic flow, parking, utility
requirements, and cost.
Page 37 of 96
_____ 6.
_____ 7.
_____ 8.
_____ 9.
_____ 10.
_____ 11.
_____ 12.
_____ 13.
_____ 14.
_____ 15.
_____ 16.
_____ 17.
_____ 18.
_____ 19.
Prepare a comprehensive business plan - include your
action timetable.
Decide on your business hours.
Secure necessary capital. (Bank loan, budget to save,
borrow on insurance, etc.)
Obtain needed facilities, equipment, furnishings,
signage, supplies, stock.
Recruit personnel. Establish job descriptions and
training program.
Print business cards, stationery, invoice or statement
forms.
Register name of business (your assumed name)
and/or file articles of incorporation with the Secretary
of State. Publish notice in newspaper.
Secure any necessary permits, licenses, or zoning
variations. Check with both local and state licensing
agencies.
Register your business with the state and obtain a
Sales & Use Tax Permit (if applicable).
Register for Federal tax number (Form SS-4) and
obtain employee tax and withholding information from
the IRS.
Establish bank account (separate from personal
account). Shop for the bank and services that best suit
your needs.
If you intend to hire employees in your business,
phone your Department of Economic Security or
Workforce Commission.
Phone the IRS for a free "Small Business Tax Kit" at 1800-829-3676. For information about free Tax
Education Workshops, call 1-800-829-1040 or check
out the IRS website for this information.
Issue news releases. Publicize your new venture.
For this section, please refer to the Excel® spreadsheet entitled Step 6
- Startup Costs.
Page 38 of 96
Explain your research and how you arrived at your forecasts of
expenses. Give sources, amounts, and terms of proposed loans. Also
explain in detail how much will be contributed by each investor and
what percent ownership each will have. To do this, you will have a
page entitled Step 6 - Startup Costs Narrative.
Instructions on How to Complete this Section in the Excel®
Spreadsheet
In the Excel® spreadsheet, you will either enter the dollar amount that
you know will reflect the projected cost of the item to the left, or use
the best estimate approach we told you about earlier.
In Column C, these dollar amounts will reflect the actual start up costs
while the dollar amounts in Column G will reflect a gross amount spent
over a 3 month period. This is considered your Start Up Period.
The total amounts of Column C and Column G represent the total Start
Up Cost.
Complete the Start Up Costs Section in the Excel® Spreadsheet
Go to the Excel® Spreadsheet to the tab labeled Step 6 – Start Up
Costs. Fill in the information and save your work.
When You Have Completed the Start Up Costs and
Capitalization
Seven, The Marketing Plan.
Page 39 of 96
Start Up Costs
Page 40 of 96
Step Seven of the Home Health Care Agency Business
Plan
The Marketing Plan for Your Home Health Care Agency
Marketing & Sales: Business Plan Basics
Every good marketing plan should include two major parts - a
definition of your target market and a specific outline to market,
promote and sell your product or service.
Target Market
It's critical to clearly define your home health care agency target
market in your Home Health Care Agency Business Plan - investors
expect it. Tell your business plan reader about your customers and
describe their defining characteristics in detail. Include information
such as age, gender, geographic location, income bracket, buying
similarities, and more.
The goal of this section is to build a demographic profile of your typical
home health care agency customer. The more clearly you pinpoint the
defining traits of your customer, the easier it is to construct a
marketing program to reach them effectively.
The information and research included in your target market section
should originate from primary and secondary sources. Primary sources
includes information that you discover or conclude from personal
observation and research, such as personal studies, results of
questionnaires, site visits, and conversations with experts in your
home health care agency industry. Secondary sources include such
sources as journals, books, published reports, government statistics,
or internet findings.
Marketing Program
After you define your target market, you need to determine specifically
how you will reach them. Outline the details and steps necessary to
reach potential customers and convert them from prospects to paying
customers. It is important to demonstrate to investors that you have
identified specific marketing avenues and procedures to effectively sell
your home health care products or services. Answer questions such as
the following in your marketing program section:
•
What specific marketing mediums will you use to reach your
customer?
Page 41 of 96
•
•
•
•
•
How often will each be used? What will they cost? Why did you
choose these marketing avenues over others?
What marketing materials will you need? (brochures, website,
etc)
Who will design your marketing materials? What will they cost?
What is the cost of marketing materials per prospect or client?
(You may choose to include marketing pieces in the appendix of
your business plan)
Will your company be able to attract PR? Why will they run your
story? What's the "angle"? Which publications and mediums will
you target?
Marketing & Sales: Mistakes to Avoid
Here are some of the most common mistakes found in the marketing
and sales section:
•
•
•
•
•
•
•
•
•
•
Defining your target market too widely and assuming success
will result from simply capturing a "small portion" of this
enormous market.
Unclear definition of your home health care agency target
market.
Attempting to attack an entire market instead of a narrow niche.
Making assumptions about your target market without research
or concrete support.
Not specifically identifying the mediums you will use to advertise
and promote your home health care products and services.
Omitting details such as when, where, why and how you will
reach your target customer - along with costs.
Making the assumption that offering a lower price will lead to
increased sales.
Underestimating the importance of packaging, brand name, and
reputation.
Attempting to immediately fill several lucrative but unrelated
markets.
Lacking clarity about how future changes might affect your
market.
The Marketing Plan (an example is at the following link: Marketing
Plan) consists of six (6) primary sections and five (5) sub-sections
under Marketing Strategy. Those sections are:
Economics
Page 42 of 96
Product
Customers
Competition
Niche
Marketing Strategy
Promotion
Promotional Budget
Pricing
Proposed Location
You will gather the information necessary for these sections to fit your
exact demographical area. This is not something that can be a “One
Size Fits All” scheme. Someone starting a home health care agency in
Chicago will have different statistics than someone starting a home
health care agency in a small town in Arkansas. The only way to
gather this information is by conducting market research for your
specific demographical area.
Target Market: Business Plan Basics
The target market section of your Home Health Care Agency Business
Plan must clearly identify the current and prospective buyers of your
home health care agency products and/or services. Your goal in
preparing the target market section is to demonstrate to readers that
you clearly understand who your customers are and how your home
health care products/services directly meet the needs of the
marketplace. Properly identifying your potential customer base also
helps to drive overall marketing and sales strategies that you will
include within other sections of your Home Health Care Agency
Business Plan.
Although your home health care product or service may meet the
needs of a large constituency of potential customers, the goal is to
define your customer base as specifically as possible, both
quantitatively and qualitatively. Consider the follow types of
characteristics for inclusion in the target market section of your Home
Health Care Agency Business Plan:
Size
How large is your target market? Are there 1,000 business buyers? 10
million potential consumers ready to purchase your product? Or a
small handful of very large target customers?
Page 43 of 96
Demographics
The demographic traits of your customers often vary based on whether
you are focused on serving the consumer or business markets:
•
•
Consumer - Income, Occupation, Gender, Single/Married, Ethnic
Group, Education
Business - Industry, Product/Service, Years in Business,
Revenue, Employee Size, Private/Public
Geographic
Where are your home health care agency customers located? While
technology has made location less of an issue for many companies, it
doesn’t mean you should overlook the importance of defining the
geographic location of your home health care agency customers.
Clarifying these issues also helps to ensure that your marketing and
sales strategies/budgets properly match your goals to capture market
share.
Other Characteristics
What are some of the more subjective traits that define your
customers? This might include things such as current buying
motivations, perceived shortcomings of other solutions in the market,
and trends/purchasing shifts likely to occur within your target market.
Naturally, the more you understand your customers, the better your
chances of success. Many times the best approach to answer the
target market question: Who is our customer? Is to invest time and
resources in primary market research. Conduct simple surveys or
focus groups. And if feasible, work with a reputable market research
firm to guide you through the process.
At the very least, use the Internet and industry groups to locate
market research studies and statistics for your Home Health Care
Agency Business Plan. These resources can range from free
information available on websites to expensive professional market
research studies prepared by experts in the field.
Performing primary research enables you to gather and document the
quantitative and qualitative information needed to prepare a solid
target market section for your Home Health Care Agency Business
Plan.
Target Market: Mistakes to Avoid
Page 44 of 96
Here are some of the "don'ts" to avoid when writing the Target Market
section of your Home Health Care Agency Business Plan:
•
•
•
•
•
•
Don't assume that everyone is a buyer of your home health care
agency product/service.
Don't be unclear about the characteristics that define who your
target customers are.
Don't assume you must have a "huge" target market - a welldefined target market that your home health care agency can
serve is far better.
Don't jump to conclusions about why your target market needs
you - instead explain how you meet their needs.
Don't underestimate the value of focus - sell a specific home
health care agency product/service to a specific group.
Don't try to attack too many markets at once - particularly if you
are a startup or early-stage home health care agency.
Market Research Basics
Market Research - Why?
No matter how good your product and your service, your home health
care agency cannot succeed without effective marketing. This begins
with careful and systematic research. It is very dangerous to simply
assume that you already know about your intended market. You need
to do market research to make sure that you are on correct track. Use
the business planning process as your opportunity to uncover data and
question your marketing efforts. Your time will be well spent.
Market Research - How?
There are 2 kinds of market research: primary and secondary.
Primary market research means gathering your own data. For
example, you could do your own traffic count at a proposed location,
use the yellow pages to identify competitors, and do surveys or focus
group interviews to learn about consumer preferences. Professional
market research can be very costly, but there are many books out that
show small business owners how to do effective research by
themselves.
Page 45 of 96
In your marketing plan, be as specific as possible; give statistics &
numbers and sources. The Marketing Plan will be the basis, later on, of
the all-important sales projection.
Secondary research means using published information such as home
health care agency industry profiles, trade journals, newspapers,
magazines, census data, and demographic profiles. This type of
information is available in public libraries, home health care agency
industry associations, Chambers of Commerce, vendors who sell to the
home health care agency industry, government agencies (Commerce
Dept. and state and local development agencies), and the SBA Business
Information Centers.
Start with your local library. Most librarians are pleased to guide you
through their business data collection. A good way to start is at the
SBA site, http://www.sba.gov/; click the Outside Resources button for a
great collection of resource links. Your Chamber of Commerce has
good information on the local area. Trade associations and home
health care agency trade publications often have excellent industry
specific data.
The Economics of the Home Health Care Agency Industry
You will need to gather information from your market research that will
be able to address these questions and provide facts about your home
health care agency industry:
What is the total size of your home health care agency market?
What percent share of the market will you have? (This is important only
if you think you will be a major factor in the market.)
Current demand in your target market.
Trends in target market - growth trends, trends in consumer
preferences, and trends in product development.
Growth potential and opportunity for a business of your size.
What barriers to entry do you face in entering this market with your
new home health care agency? Some general typical barriers are:
High capital costs
High production costs
Page 46 of 96
High marketing costs
Consumer acceptance/brand recognition
Training/skills
Unique technology/patents
Unions
Shipping costs
Tariff barriers/quotas
And of course, how will you overcome the barriers?
You will also need to address how could the following affect your home
health care agency?
Change in technology.
Government regulations.
Changing economy.
Change in your home health care agency industry.
Product
In the Step Five, Products and Services section, you described your
products and services as YOU see them. Now describe them from your
CUSTOMER'S point of view.
Features and Benefits
List all your major products or services.
For each product/service that you provide in your home health care
agency:
Describe the most important features. That is, what will the
product do for the customer? What is special about it?
Now, for each produce/service, describe its benefits. That is,
what will the product do for the customer?
Note the difference between features and benefits, and think about
them. For a general example, a house gives shelter and lasts a long
time, is made with certain materials and to a certain design; those are
its features. Its benefits include pride of ownership, financial security,
providing for the family, inclusion in a neighborhood. You build
features into your home health care agency product so you can sell the
benefits.
Page 47 of 96
Customers
Identify your targeted customers, their characteristics, and their
geographic locations; i.e., demographics.
You may well have more than one customer group. Identify the most
important groups. Then, for each consumer group, construct what is
called a demographic profile:
Age
Gender
Location
Income level
Social class/occupation
Education
For business customers, the demographic factors might be:
Industry (or portion of an industry)
Location
Size of firm
Quality/technology/price preferences
Competition
What products and companies will compete with you and your home
health care agency?
List your major competitors:
Names & addresses
Will they compete with you in across the board, or just for certain
products, certain customers, or in certain locations?
Will you have important indirect competitors?
How will your home health care agency products/services compare with
the competition?
Page 48 of 96
Niche Market
Now that you have systematically analyzed your industry, your home
health care agency product, your customers and the competition, you
should have a clear picture or where your home health care agency fits
into the marketplace.
In one short paragraph, define your niche market, your unique corner
of the market.
Marketing Strategy
Now you can outline a marketing strategy for your home health care
agency that is consistent with your niche.
Promotion
How will you get the word out to customers?
Advertising: what media, why, and how often? Why this mix and not
some other?
Have you identified low cost methods to get the most out of your
promotional budget?
Will you use methods other than paid advertising, such as trade shows,
catalogs, incentives, word of mouth (how will you stimulate it?),
network of friends or professionals?
What image do you want to project? How do you want customers to
see you?
In addition to advertising, what plans do you have for graphic image
support? This includes things like logo design, cards and letterhead,
brochures, signage, and interior design.
Should you have a system to identify repeat customers, and then
systematically contact them?
Promotional Budget
How much will you spend on the items listed above?
Before startup? (These numbers will go into your Startup budget.)
Page 49 of 96
Ongoing? (These numbers will go into your Operating Plan budget
which we will discuss later.)
Pricing
Explain your method(s) of setting prices. For most small businesses,
having the lowest price is not a good policy. It robs you of needed
profit margin; customers may not care as much about price as you
think; and large competitors can under price you anyway. Usually you
will do better to have average prices and compete on quality and
service in your home health care agency.
Does your pricing strategy fit with what was revealed in your
competitive analysis?
Compare your prices with those of the competition. Are they higher,
lower, the same? Why?
How important is price as a competitive factor? Do your intended
customers really make their decisions mostly on price?
What will be your customer service and credit policies?
Proposed Location
Probably you do not have a precise location picked out yet or you may
be planning to operate your home health care agency from your home.
This is the time to think about what you want and need in a location.
Many startups run successfully from home for a while.
You will describe your physical needs later, in the Operational Plan
section of your Home Health Care Agency Business Plan. Here in the
marketing section, analyze your location criteria as they will affect your
customers.
Is your location important to your customers? If yes, how so?
If customers come to your place of business:
Is it convenient? Parking? Interior spaces? Not out of the way?
Is it consistent with your image?
Is it what customers want and expect?
Where is the competition located? Is it better for you to be near them
or distant?
Page 50 of 96
From a general position, this means how do you sell your
products/services?
Retail
Direct (mail order, web, and Internet online website)
Wholesale
Your own sales force
Agents
Independent reps
Bid on contracts
For you and your home health care agency, it might simply be how to
get the word out about your business.
Complete the Marketing Plan Section in the Excel® Spreadsheet
Go to the Excel® Spreadsheet to the tab labeled Step 7 – Marketing
Plan. Fill in the information and save your work.
When You Have Completed the Marketing Plan
your Home Health Care Agency Business Plan, so proceed to Step Eight,
Sales Forecasts.
Page 51 of 96
The Business Plan for the Name of Your Home Health Care
Agency
The Marketing Plan
Economics
Product
Customers
Competition
Niche
Marketing Strategy
Promotion
Promotional Budget
Pricing
Proposed Location
Page 52 of 96
Page 53 of 96
Step Eight of the Home Health Care Agency Business
Plan
Sales Forecast
Too many would be entrepreneurs want success so bad, they refuse to
listen or consider the possibility of failure. Somehow, they confuse
caution and reasonable doubt with negative thinking. They are blinded
by fantasy and unrealistic dreams that they believe real.
If you have ample historical sales data, reasonable forecasts are easy;
even calculating the figures with intuition and knowledge of the home
health care agency market can result in a creditable projection. The
problem is new products or companies with no sales history are
difficult to predict. As accurate as the numbers may appear, it is still a
guess. In addition, guesses are based on judgment-good and bad.
A sales forecast is just that, a forecast, an educated guess with a
possibility of error. Every business, every new product or project has a
break-even point; a minimum sales volume necessary to generate
enough income to cover your expense. If the forecast is above your
break-even, then you have a margin of safety. If not, you may be
headed for trouble with no room for error. Be sure to compare the
sales forecast to that all-important break-even sales or income level. It
will give you a yardstick of risk.
You may be comfortable with statistics or any of the number of
methods for sales forecasting, but be uncomfortable with sales
guesses that are too optimistic. If you want to avoid heartache and
money worries, always question sales projections and never assume
they are accurate.
Your home health care agency financial plan will be highly scrutinized
by your business plan reader. All the ideas, concepts and strategies
discussed throughout your entire business plan form the basis for, and
should flow into, your financial statements and projections in some
manner. When it gets down to it, your reader wants to know if and
when your home health care agency will make money and become
profitable.
Page 54 of 96
Financial statements and projections should follow Generally Accepted
Accounting Standards and must (at a minimum) include properly
prepared balance sheets, income statements and cash flow
statements. Bankers and investors are familiar with the correct
content, organization and presentation of financial statements, and
expect to see them in your business plan. Don't cut corners or attempt
to devise your own method of financial and pro forma statement
presentation.
Sales Forecast for Your Home Health Care Agency
Now that you have described your products or services, customers,
markets, and marketing plans in detail, it is time to attach some
numbers to your plan. Use the Sales Forecast spreadsheet to prepare a
month-by-month projection for your home health care agency. The
forecast should be based upon your historical sales (if any), the
marketing strategies that you have just described, upon your market
research, and home health care agency industry data, if available.
You may wish to do two forecasts: 1) a "best guess", which is what you
really expect, and 2) a "worst case" low estimate that you are confident
you can reach no matter what happens.
For this section, please refer to the Page 8 of the Excel® spreadsheet
entitled “Sales Forecast”. This is the Twelve-Month Sales Forecast
Spreadsheet.
Remember to keep notes on your research and your assumptions as
you build this sales forecast, and all subsequent spreadsheets in the
plan. This is critical if you are going to present it to funding sources.
In Column A, you will list the products and services that you will offer
in your home health care agency. Here you will enter each and every
product that you identified in Step 5, Products and Services.
Input your dollar figures for each home health care agency product or
service into the correct columns. As you will note, Row 3 will total the
revenue (sales) from all of the products and services.
Complete the Sales Forecast Section in the Excel® Spreadsheet
Page 55 of 96
Go to the Excel® Spreadsheet to the tab labeled Step 8 – Sales
Forecast. Fill in the information and save your work.
When you are finished, you have completed an annual sales forecast.
When You Have Completed the Sales Forecast
your Home Health Care Agency Business Plan, so proceed to Step Nine
– The Operational Plan.
Page 56 of 96
Step Nine of the Home Health Care Agency Business
Plan
The Operational Plan for Your Home Health Care Agency
Operational Plan: Business Plan Basics
The operational plan deals specifically with the internal operations and
equipment necessary to produce your products or services. The
following are selected areas that need to be addressed in this section.
Location
Where will your home health care agency be located? What square
footage is needed, in how many locations? What type of space is it?
Office space, storage, sales area, retail space for the home health care
products? What is the advantage, if any, of your location? At what
point will the goals of the home health care agency exceed the above
mentioned facilities? Provide a layout of your facility in the appendices
of your business plan.
Equipment
Outline and describe the significant equipment needed in the course of
operating your home health care agency, including cost. What does
the equipment do and how do the pieces function together? Will you
purchase or lease your equipment? Why and from whom? Be sure to
include manufacturing equipment, vehicles, computers, and office
equipment.
Please Note!
Further Explanation of Equipment
In the course of operating your home health care agency, you
may decide to produce a product that requires production. An
example of a production product need is anything you might
manufacture to promote your business such as ball caps, tee
shirts and other novelty items. Throughout the remainder of
this business plan explanation, we will be referring to the
production or manufacturing aspects of the business plan. If
you do not intend to offer products that require production, you
will, of course, ignore this specific information. But since
someone starting a home health care agency in another part of
the country may decide to produce these types of products
requiring production, we are obligated to include the
Page 57 of 96
production and manufacturing process information in this
business plan explanation.
Labor
How many employees will you need? Full-time? Part-time? Break them
out by function, number of hours worked, and hourly pay. Describe the
skill sets needed. What are the salaries of those in management,
production, distribution, sales and administration? What are your
hours of operation? What criteria are used to locate and hire quality
employees?
Manufacturing & Service Process
Walk the reader through your manufacturing and service process from
raw material through finished product. Where will you obtain and store
raw materials? Outline your key suppliers, the purchasing process, and
unique purchasing requirements. Where will finished goods be stored,
and what is the associated space and cost? How will finished goods (or
services) be distributed? What is the lead time for the entire process?
How will quality be measured, controlled, and improved? Explain the
technology requirements for your manufacturing process.
Other Issues to Consider:
•
•
•
How will you keep track of inventory? Provide specific procedures
and equipment used.
How will you maintain quality control? What are the procedures
to ensure that you are providing the top quality home health
care agency product or service?
What type of insurance does your business need? Discuss the
legal liability issues of your home health care agency business.
Operational Plan: Mistakes to Avoid
Here are some of the most common mistakes found in the operational
section of business plans:
•
•
•
Failing to clearly outline the process by which you manufacture,
distribute and sell your home health care agency product or
service.
Failing to account for all production costs (direct and indirect).
Failing to assess the manufacturing process in terms of
manufacturing costs, taxes, shipping, installation, maintenance,
serviceability, etc.
Page 58 of 96
•
•
•
•
•
•
Failing to develop adequate inventory control and quality
assurance guidelines.
Failing to identify all machinery and equipment needed.
Failing to properly plan the layout of the plant, the workflow
process, and the material handling procedures.
Failing to properly outline personnel management, scheduling,
and hiring practices.
Failing to properly plan for contingencies to meet production and
staffing challenges.
Failing to plan for long term facility and equipment changes.
The Operational Plan (an example can be found at the following link:
Operational Plan) explains the daily operation of your home health care
agency; its location, equipment, people, processes, and surrounding
environment.
In this step, you will fill out the Excel® spreadsheet with the answers to
questions posed in the following section. Attach supporting
documentation as an Appendix (once again, be sure to keep a
chronological order to your Appendixes)
The nine (9) sections in the Operational Plan include:
Production
Location
Legal Environment
Personnel
Inventory
Suppliers
Credit Policies
Production
Product Production
Page 59 of 96
How and where are your home health care agency products/services
produced?
Explain your methods of:
Production techniques & costs
Quality control
Customer service
Inventory control
Product development
Location
What qualities do you need in a location? Describe the type of location
you will have for your home health care agency.
Physical requirements:
Space; how much?
Type of building
Zoning
Power and other utilities
Access:
Is it important that your location be convenient to transportation or to
suppliers?
Do you need easy walk-in access?
What are your requirements for parking, and proximity to freeway,
airports, railroads, shipping centers?
You might include a drawing or layout of your proposed facility.
Construction? Most new companies should not sink capital into
construction, but if you are planning to build, then costs and
specifications will be a big part of your plan.
Cost: Estimate your occupation expenses, including rent, but also
including: maintenance, utilities, insurance, and initial remodeling
costs to make it suit your needs. These numbers will become part of
your financial plan.
What will be your business hours?
Legal Environment
Page 60 of 96
Describe the following
Licensing and bonding requirements required for your home health care
agency
Permits
Health, workplace or environmental regulations
Special regulations covering your industry or profession
Zoning or building code requirements
Insurance coverage
Produced product trademarks, copyrights, or patents (pending,
existing, or purchased)
Personnel
Number of employees
Type of labor (skilled, unskilled, professional)
Where and how will you find the right employees?
Quality of existing staff
Pay structure
Training methods and requirements
Who does which tasks?
Do you have schedules and written procedures prepared?
Have you drafted job descriptions for employees? If not, take time to
write some. They really help internal communications with employees.
For certain functions, will you use contract workers in addition to
employees?
Inventory
What kind of inventory will be kept: raw materials for production,
supplies, finished goods?
Average value in stock (i.e., what is your inventory investment)?
Rate of turnover and how this compares to industry averages?
Seasonal buildups for production?
Lead-time for ordering?
Page 61 of 96
Suppliers
Identify key suppliers.
Names & addresses
Type & amount of inventory furnished
Credit & delivery policies
History & reliability
Should you have more than one supplier for critical items (as a
backup)?
Do you expect shortages or short term delivery problems?
Are supply costs steady or fluctuating? If fluctuating, how would you
deal with changing costs?
Credit Policies
Do you plan to sell or offer your home health care agency products and
services on credit?
Do you really need to sell on credit? Is it customary in your home
health care agency industry and expected by your clientele?
If yes, what policies will you have about who gets credit and how
much?
How will you check the creditworthiness of new applicants?
What terms will you offer your customers; i.e., how much credit and
when is payment due?
Will you offer prompt payment discounts (hint: do this only if it is usual
and customary in your industry).
Do you know what it will cost you to extend credit? Have you built the
costs into your prices?
If you do extend credit, you should do an aging at least monthly, to
track how much of your money is tied up in credit given to customers,
Page 62 of 96
and to alert you to slow payment problems. A receivables aging looks
like this:
Accounts
Receivable
Aging
Total
Current
30 Days
60 Days
90 Days
Over 90
Days
Client One
Client Two
Client Three
Client Four
You will need a policy for dealing with slow paying customers.
When do you make a phone call?
When send a letter?
When do you get your attorney to threaten?
You should also age your Accounts Payable, what you owe to your
suppliers. This helps you plan who to pay and when. Paying too early
depletes your cash, but paying late can cost you valuable discounts and
damage your credit.
Are prompt payment discounts offered by your proposed vendors?
A payables aging looks like this:
Accounts
Total
Payable Aging
Current
(discounts?)
30 Days
60 Days
90 Days
Over 90
Days
Vendor One
Vendor Two
Complete the Operational Plan Section in the Excel®
Spreadsheet
Page 63 of 96
Go to the Excel® Spreadsheet to the tab labeled Step 9 - Operational
Plan. Fill in the information and save your work.
When You Have Completed the Operational Plan
your Home Health Care Agency Business Plan, so proceed to Step Ten,
Management and Organization.
Page 64 of 96
Production
Location
Legal Environment
Personnel
Inventory
Suppliers
Credit Policies
Page 65 of 96
Step Ten of the Home Health Care Agency Business
Plan
Management and Organization of Your Home Health Care
Agency
In the Excel® spreadsheet on the tab labeled Step 10 – Mgt and
Organization (see the example here Management and Organization)
you will describe the management and organization plan you have in
mind now for your home health care agency.
Who will manage the home health care agency business on a day to
day basis? What experience does that person bring to the business?
What special or distinctive competencies? Is there a plan for
continuation of the business if this person lost or incapacitated?
If you will have more than about ten employees, create an
organizational chart showing the management hierarchy and who is
responsible for key functions.
Management Team: Business Plan Basics
Many investors base their entire investment decision on the
management team behind a venture. Investors expect a well-rounded
team of professionals with experience in every function critical to the
home health care agency business. Your management section should
clearly demonstrate who each person is, why he or she is on your
team, and what each person will do.
Try and limit your management team to 3 to 5 people - and to those
individuals involved in the day to day home health care agency
operations that have the greatest impact on the future success of your
business. Everyone else is considered either an employee, or if not
involved in day to day operations should be included as a member of
the Board of Advisors, Board of Directors or consultants. A discussion
of your employees should be included in the operations section.
The basic components of the management section include:
Specific Team Members
Construct a narrative description for each team member, clarifying his
or her background and intended contribution. This should include:
•
Title of this position
Page 66 of 96
•
•
•
•
Duties and responsibilities of this position - what will they be
doing, which functions will they be overseeing, who do they
supervise, who do they report to, etc.
Previous home health care agency industry and related home
health care agency experience - should be those that relate
directly to this new position. Who have they worked for, what
were they doing, for how long did they do it, etc.
Previous Successes - what did they accomplish, did they help
grow a home health care agency business, or were they
responsible for a turnaround or some new breakthrough idea.
Education; keep educational descriptions brief
Board of Directors
Briefly describe who is on your Board and what role they play within
your home health care agency. Briefly list the names, backgrounds,
and contributions that will be made by each board member.
Board of Advisors
Your board of advisors should consist of individuals with valuable home
health care agency industry expertise and insight, and they help and
consult with you on your business. A solid and experienced board of
advisors goes a long way towards building credibility in the eyes of
investors. Briefly list the names, backgrounds, and contributions that
will be made by each of your board members.
Consultants
The last part of your management section should include a brief
mention of the outside consultants you will work with as your home
health care agency grows. A typical list of consultants would include
accountants, attorneys, bankers, insurance agents, and experts such
as technology advisors, web developers, and payroll specialists, for
example.
Explain the background of the founder(s) of the home health care
agency at some length. However, limit this background information to
under a page. Stick to the facts on all your management team bios,
making it evident why each person is experienced, why they hold their
position and the benefits they provide your home health care agency.
One last note: Always keep in mind that given the choice between an
excellent business concept with second-rate managers and a mediocre
business concept with top-notch managers, investors prefer the latter.
Page 67 of 96
Management Team: Mistakes to Avoid
The following are several common mistakes that decrease the
effectiveness of the management team section of your business plan:
•
•
•
•
•
•
Depending on unqualified friends or family in key management
positions.
Assuming that previous success in other industries applies to
your home health care agency.
Presenting a "one-man-team" management philosophy.
Investors know it's difficult to wear every hat and successfully
run and grow a company.
Attempting to attract top managers without sharing ownership.
Lacking non-compete agreements for critical management staff.
Failing to attract and assemble a knowledgeable board of
advisors.
Professional and Advisory Support for Your Home Health Care
Agency
Here, you will list the following information about the individuals that
will be involved in your home health care agency. Be through and
attach resumes or information from websites or brochures about these
individuals, if available. This adds to the creditability of your home
health care agency organization.
List board of directors and management advisory board.
Attorney
Accountant
Insurance agent
Banker
Consultant(s)
Mentors and key advisors in addition to the above
Complete the Management and Organization Section in the
Excel® Spreadsheet
Go to the Excel® Spreadsheet to the tab labeled Step 10 – Mgt and
Organization. Fill in the information and save your work.
When You Have Completed the Management and Organization
Page 68 of 96
Eleven, The Financial Plan.
Page 69 of 96
Management and Organization
Page 70 of 96
Step Eleven of the Home Health Care Agency Business
Plan
The Financial Plan
Your financial plan will be highly scrutinized by your Home Health Care
Agency Business Plan reader. All the ideas, concepts and strategies
discussed throughout your entire business plan form the basis for, and
should flow into, your financial statements and projections in some
manner. When it gets down to it, your reader wants to know if and
when your home health care agency will make money and become
profitable.
Financial statements and projections should follow Generally Accepted
Accounting Standards and must (at a minimum) include properly
prepared balance sheets, income statements and cash flow
statements. Bankers and investors are familiar with the correct
content, organization and presentation of financial statements, and
expect to see them in your business plan. Don't cut corners or attempt
to devise your own method of financial and pro forma statement
presentation.
In most cases, capital sources expect financial projections for a three
to five year period, and historical statements for the past three years
(or since inception if operating period is less than three years).
Consider organizing your financial statements as follows:
Income Statements
•
•
•
Year 1 - Monthly Projections
Years 2 thru 5 - Quarterly or Yearly Projections
Existing businesses should provide income statements for the
last 3 years if available.
Balance Sheets
•
•
•
Year 1 - Quarterly Projections
Years 2 thru 5 - Yearly Projections
Existing businesses should provide current balance sheet and
balance sheets from the prior 2 years if available.
Page 71 of 96
Cash Flows
•
•
Year 1 - Monthly Projections
Years 2 thru 5 - Quarterly or Yearly Projections
Other information that you may consider including:
Financial Assumptions
These financial assumptions are critical to properly convey the
"reasons behind the numbers" for outsiders reviewing your financial
projections. Explain how you calculated the numbers you used in your
financial statements. For example, we will sell X number of Y per
month at $X per Y. This is projected to increase by 4% every month,
etc.
Break-Even Analysis
These break-even analysis figures demonstrate the volume of sales, in
units and dollars that must be generated to cover fixed and variable
expenses. At the break-even point, you start becoming profitable.
Normally this data is presented in a graph format with sales on the Xaxis and specific products and services on the Y-axis.
Sources and Uses of Funds
This section explains to your reader which sources you expect to
secure capital from, and what you specifically plan to spend it on.
Investment Structure and Objectives
This section outlines the amount of capital needed, various investment
structures, and the estimated return to your investor. It is critically
important to tell your investor how they will recoup their money, when
they can cash out, and what they will receive as a return.
Financial Ratios
Providing standard financial ratios helps your business plan reader to
analyze how well your home health care agency will perform compared
to other companies within your industry. For existing companies, show
the trends over the last 3 to 5 years to outline any improvements in
your performance.
Financial Projections: Mistakes to Avoid
Here are some of the most common mistakes found in the financial
projection sections of business plans:
Page 72 of 96
•
•
•
•
•
•
•
•
•
•
•
Failing to include the "Big 3" statements and projections (income
statement, balance sheet, cash flow).
Presenting sales and profit projections that are unrealistic and
unfounded.
Omitting financial assumptions to explain where the "numbers"
originated.
Presenting "creative" rather than "accepted" financial
statements.
Underestimating expenses and not budgeting for unexpected
costs.
Lack of financial investment on the part of the founders.
Including excessive salaries and office expenses at start-up.
Offering a lower percentage of ownership than the investment
requirement demands.
Offering a return on investment that is out of line for your
industry.
Absence of contingencies and projections for worst case
scenarios.
Financial statements that are not prepared or reviewed by a
reputable accountant.
The Financial Plan for Your Home Health Care Agency
The Financial Plan consists of a 12-month Profit and Loss Statement, a
Projected Cash Flow, a Balance Sheet, and a Breakeven Calculation.
Together they constitute a reasonable estimate of your home health
care agency financial future. More importantly, however, the process of
thinking through the Financial Plan will improve your insight into the
inner financial workings of your home health care agency.
Twelve Month Profit and Loss Projection
Many business owners think of this as the centerpiece of their business
plan. This is where you put it all together in numbers and get an idea
of what it will take to make a profit and be successful in your home
health care agency.
This twelve month forecast will provide you information related to
forecast sales, cost of goods sold, expenses, and profit month by month
for one year. Your sales projections will come from the Sales Forecast
you did in Step Eight.
Page 73 of 96
Now, you need to refer to the Excel® spreadsheet entitled Step 11 Profit-Loss Statement.
Profit projections should be accompanied by a narrative explaining the
major assumptions used to estimate company income & expenses. You
will provide this narrative in the Excel® document entitled Step 11 Narrative and shown in this document by clicking here: Profit and Loss
Statement.
Note
Research Notes: In addition, keep careful notes on your
research and assumptions, so you can explain them later if
necessary, and also so you can go back to your sources when it
is time to revise your plan later on.
You will see that Row 4, Gross Sales is already filled in from the Sales
Forecasts section of the Excel® spreadsheet.
Fill in the dollar figures based on your estimates.
When you have finished this page in the Excel® spreadsheet, you will
have your twelve month Profit and Loss Statement.
Projected Cash Flow
Now refer to the Excel® spreadsheet entitled Step 11 - Projected Cash
Flow.
If the profit projection is the heart of your home health care agency
plan, then cash flow is the blood. Businesses fail because at some point
they cannot pay their bills. Every part of your Home Health Care
Agency Business Plan is important, but none of it means a thing if you
run out of cash.
The point of this step is to plan how much you need before startup, for
preliminary expenses, operating expenses, and reserves. You should
keep updating it and using it afterwards as well. It will enable you to
foresee shortages in time to do something about them; perhaps to cut
expenses, or perhaps to negotiate a loan.
Page 74 of 96
There is no great trick to preparing it: the cash flow projection is just a
forward look at your business checking account.
Use the Profit and Loss Statement for a starting point. For each item,
determine when you actually expect to receive cash (for sales) or when
you will actually have to write a check (for expense items)
Your Cash Flow Projection will show you whether your working capital is
adequate. Clearly, if your projected cash balance ever goes negative,
you will need more startup capital. This plan will also predict just when
and how much you will need to borrow. New loans go on Row 42.
In the Excel® spreadsheet under the tab Step 11 – Narrative and an
example is shown by clicking here, The Financial Plan, you will need to
explain your major assumptions; especially, those which make the cash
flow differ from the Profit and Loss Statement. For a general example:
If you make a sale in month one, when do you actually collect the
cash? When you buy inventory or materials do you pay in advance,
upon delivery, or much later?
How will this affect cash flow?
Are some expenses payable in advance? When?
Are there irregular expenses such as quarterly tax payments,
maintenance and repairs, or seasonal inventory buildup which should
be budgeted?
Loan payments, equipment purchases, and owner's draws usually do
not show on profit and loss statements, but definitely do take cash out.
Be sure to include them.
And of course, depreciation does not appear in the cash flow at all
because you never write a check for it.
Opening Day Balance Sheet
A balance sheet is one of the fundamental financial reports which any
business needs for reporting and financial management. A balance
sheet shows what items of value are held by the company (Assets), and
what its debts are (Liabilities). When liabilities are subtracted from
assets, the remainder is Owners’ Equity.
Page 75 of 96
Use the Excel® spreadsheet tab, Step 6 - Start Up Costs, as a guide to
preparing a balance sheet as of the opening day of your home health
care agency.
You need to refer to the Excel® spreadsheet Step 11 - Balance Sheet.
In this step of your Home Health Care Agency Business Plan, explain
how you calculated the account balances on your Opening Day Balance
Sheet and you will do this in the Excel® spreadsheet under the tab
Step 11 – Narrative and an example is shown here by clicking this link:
The Financial Plan.
When you have completed this spreadsheet, you will have your Opening
Day Balance Sheet.
Breakeven Analysis
A Breakeven Analysis predicts the sales volume, at a given price,
required to recover total costs. In other words, it’s the sales level that
is the dividing line between operating at a loss and operating at a
profit.
From the Excel® spreadsheet in the tab entitled Step 11 – Projected
Cash Flow that you have already prepared, you will be able to
determine how many months it will take before your home health care
agency is operating the “black” (at a profit). This Breakeven Analysis
section is a narrative of the results of the Projected Cash Flow to
profitability.
Now refer to the Excel® spreadsheet in the tab entitled Step 11 Breakeven Analysis. Here you will find the narrative that you will need
to complete to explain when your home health care agency will become
profitable. When you have finished, you will have a good idea of when
you can expect to breakeven in your home health care agency.
Include all assumptions upon which your breakeven calculation is based
in the Excel® spreadsheet under the tab Step 11 – Narrative and an
example is shown here at the following link: The Financial Plan.
When You Have Completed the Financial Plan
Page 76 of 96
Now, you ready to finish up your Home Health Care Agency Business
Plan and you should now go to the Appendixes section.
Page 77 of 96
The Financial Plan
Profit and Loss Statement
Balance Sheet
Breakeven Analysis
Page 78 of 96
Appendixes
The following is a list of all the spreadsheets required in this business
plan in order of appearance:
Name of spreadsheet
Page
Your Net Worth
Startup Costs
Sales Forecast
Profit and Loss Statement
Projected Cash Flow
Balance Sheet
Breakeven Analysis
1
2
3
4
5
6
7
8
Include details & studies used in your Home Health Care Agency
Business Plan; for example:
Brochures & advertising materials
Industry studies
Blueprints & plans
Maps & photos of location
Magazine or other articles
Detailed lists of equipment owned or to be purchased
Copies of leases & contracts
Letters of support from future customers
Any other materials needed to support the assumptions in this plan
Market research studies
List of assets available as collateral for a loan
Your Home Health Care Agency Business Plan Is Now Complete
and Ready for Printing
You are now ready to format and print your Home Health Care Agency
Business Plan. Depending on the amount and size of text you used
and imputed, the amount of additional lines in the spreadsheets and
the fonts used, and the format you use for the page setups (portrait or
landscape), and the paper you use (letter or legal), you will need to
format the entire workbook. Sometimes, you must use page setup
and set different settings for different pages.
Page 79 of 96
To review how to format and customize your Home Health Care
Agency Business Plan for how it will look when you view or print it,
click here.
In Conclusion
Your Business Plan for your home health care agency is complete, or
should we say as complete as it can be for now. A Business Plan is a
work in progress, a never ending process to plan your home health
care agency, revise the projections, adjusts the expenses, and plan for
your overall success. You should revisit your Home Health Care
Agency Business Plan often and, as a rule, you should revisit the Home
Health Care Agency Business Plan at least once every three months or
so.
Page 80 of 96
Attachment One
A General Discussion of Basic Legal Forms of Ownership
This information is for individuals who are ready to start operation and
want instruction on the regulations that affect most small business start
ups. You might want to start by deciding if you want to operate as a
proprietor, a partnership or a corporation.
You will want to know what taxes might affect your business and if you
are going to be employing people in your business, then there are a
number of regulations that may affect you. Also included is a handy
start up checklist indicating regulations that will likely affect your
business.
This information discusses the basic regulations that are common to
most start ups and does not encompass permits, licenses or regulations
that may be specific to the industry or type of business you plan to
work in.
Proprietorship, Partnership or Incorporation?
•
•
•
•
•
•
•
Aboriginals and Forms of Business
From a legal point of view, there are three common types of
businesses: sole proprietorship, partnership and corporation. Each has
different and important implications for liability, taxation and
succession. A lawyer or accountant can advise you on which is suited to
your needs, and undertake the necessary formalities.
This is the simplest way to set up a business. A sole proprietor is fully
responsible for all debts and obligations related to his or her business.
A creditor with a claim against a sole proprietor would normally have a
right against all of his or her assets, whether business or personal. This
is known as unlimited liability.
In a proprietorship, one person performs all the functions required for
the successful operation of the business. The proprietor secures the
capital, establishes and operates the business, assumes all risks,
Page 81 of 96
accepts all profits and losses, and pays all taxes. The proprietor is said
to be self-employed.
Advantages:
- Low start-up costs
- Greatest freedom from regulation
- Owner in direct control of
decision making
- Minimal working capital required
- Tax advantages to owner
- All profits to owner
Disadvantages:
- Unlimited liability
- Lack of continuity in
business organization
in absence of owner
- Difficulty in raising capital
(Return to PROPRIETORSHIP, PARTNERSHIP OR INCORPORATION?)
A partnership is an agreement in which two or more persons combine
their resources in a business with a view to making a profit. In order to
establish the terms of the partnership and to protect partners in the
event of a disagreement or dissolution of a partnership, a partnership
agreement should be drawn up. Standard form partnership agreements
can also be purchased for about $5.00 at stationary stores. Partners
share in the profits according to the terms of the agreement.
In a General Partnership, two or more owners share the management
of a business, and each is personally liable for all the debts and
obligations of the business. This means that each partner is responsible
for, and must assume the consequences of, the actions of the other
partner(s).
A second type of partnership is a Limited Partnership which involves
limited partners who combine only capital. They are not involved in
managing the business and cannot be liable for more than the amount
of capital they have contributed. This is known as limited liability.
Page 82 of 96
A limited partnership also involves general partners, who are involved
in management. They are fully liable for the debts and obligations of
the business, but may be entitled to a greater share of the profits.
Advantages:
-
Ease of formation
Low start-up costs
Additional sources of investment capital
Possible tax advantages
Limited regulation
Broader management base
Disadvantages:
-
Unlimited liability
Divided authority
Difficulty in raising additional capital
Hard to find suitable partners
Possible development of conflict between partners
Partners can legally bind each other without prior approval
Lack of continuity
A corporation, also known as a Limited Company, is a legal entity which
is separate and distinct from its members (shareholders). Each
shareholder has limited liability. A creditor with a claim against the
assets of the company would normally have no rights against its
shareholders, although in certain circumstances shareholders may be
held liable. It is recommended that legal advice be sought. This type of
business can be incorporated at either the federal or provincial level.
Ownership interests in a corporation are usually easily changed. Shares
may be transferred without affecting the corporations’ existence or
continued operation.
The following characteristics distinguish it from a partnership or
proprietorship:
Limited liability - normally no member can be held personally liable for
the debts, obligations or acts of the corporation beyond the amount of
share capital the members has subscribed; and
Page 83 of 96
Perpetual succession - because the corporation is a separate legal
entity, its existence does not depend on the continued membership of
any of its members.
Advantages:
-
Limited liability
Possible tax advantage (if you qualify for a small business tax rate)
Specialized management
Ownership is transferable
Continuous existence
Separate legal entity
Easier to raise capital
Disadvantages:
-
Closely regulated
Most expensive form to organize
Charter restrictions
Extensive record keeping necessary
Double taxation of dividends
Shareholders may be held legally responsible in certain circumstances
Personal guarantees undermine limited liability advantage
Proprietorships and Partnerships are regulated by the government. See
your State Government Website.
You have the option to incorporate at a state level or at a federal level.
If a company intends to carry on its activities solely in one state, state
incorporation may be preferable. If the company wishes to expand its
activities outside of its state jurisdiction at a later date, it must obtain
an extra-state license from every other state in which it wishes to open
an office or obtain a presence.
Page 84 of 96
Under Federal Law, any individual or corporation may receive a
certificate of incorporation for any legal purpose with the exception of
operating such institutions as banks, insurance companies, and trust
and loan companies. In several states, a federally incorporated
company will still have to obtain extra state registration to operate.
Incorporating can be a very involved process and it is recommended
that you seek the advice and services of a lawyer and/or an accountant.
For information on incorporating in your state, go your state’s Website
located in Government Websites.
For more information on this subject, be sure to check out our website
at http://www.125aday.com for FREE REPORTS that will give you more
to consider in your decision making process!
Page 85 of 96
Attachment Two
Information Resources
We have provided these Information Resources to assist you in
contacting any of the listed agencies or information sources for
assistance in starting your new business.
The list includes:
Service Corps of Retired Executives (SCORE)
Small Business Development Centers (SBDCs)
Small Business Institutes (SBIs)
SBA Business Development Programs
Consumer Information Center (CIC)
U.S. Department of Agriculture (USDA)
U.S. Department of Commerce (DOC)
U.S. Department of Health and Human Services (HHS)
U.S. Department of Labor (DOL)
U.S. Department of Treasury
U.S. Environmental Protection Agency (EPA)
U.S. Food and Drug Administration (FDA)
Books, Magazine and Newspaper Articles
The SBA offers an extensive selection of information on most business
management topics, from how to start a business to exporting your
products.
Page 86 of 96
This information is listed in "The Small Business Directory". For a free
copy, contact your nearest SBA office.
SBA has offices throughout the country. Consult the U.S. Government
section in your telephone directory for the office nearest you. SBA
offers a number of programs and services, including training and
educational programs, counseling services, financial programs and
contract assistance.
Back to the list of Information Resources
- Service Corps of Retired Executives (SCORE), a national
organization sponsored by SBA of over 13,000 volunteer business
executives who provide free counseling, workshops and seminars to
prospective and existing small business people.
- Small Business Development Centers (SBDCs), sponsored by the
SBA in partnership with state and local governments, the educational
community and the private sector. They provide assistance, counseling
and training to prospective and existing business people.
- Small Business Institutes (SBIs), organized through SBA on more
than 500 college campuses nationwide. The institutes provide
counseling by students and faculty to small business clients.
For more information about SBA Business Development Programs and
services call the SBA Small Business Answer Desk at 1-800-8-ASKSBA (827-5722).
Many publications on business management and other related topics
are available from the Government Printing Office (GPO). GPO
bookstores are located in 24 major cities and are listed in the Yellow
Pages under the "bookstore" heading. You can request a "Subject
Page 87 of 96
Bibliography" by writing to Government Printing Office, Superintendent
of Documents, Washington, DC 20402-9328.
Many federal agencies offer publications of interest to small
businesses. There is a nominal fee for some, but most are free. Below
is a selected list of government agencies that provide publications and
other services targeted to small businesses.
- Consumer Information Center (CIC), P.O. Box 100 Pueblo, CO 81002
The CIC offers a consumer information catalog of federal publications.
- Consumer Product Safety Commission (CPSC)
Publications Request
Washington, DC 20207
The CPSC offers guidelines for product safety requirements.
- U.S. Department of Agriculture (USDA)
12th Street and Independence Avenue, SW
The USDA offers publications on selling to the USDA.
Publications and programs on entrepreneurship are also available
through county extension offices nationwide.
- U.S. Department of Commerce (DOC)
Office of Business Liaison
14th Street and Constitution Avenue, NW
Room 5898C
DOC's Business Assistance Center provides listings of business
opportunities available in the federal government. This service also will
refer businesses to different programs and services in the DOC and
other federal agencies.
Page 88 of 96
- U.S. Department of Health and Human Services (HHS)
Public Health Service
Alcohol, Drug Abuse and Mental Health Administration
5600 Fishers Lane
Rockville, MD 20857
Drug Free Workplace Helpline: 1-800-843-4971. Provides
information on Employee Assistance Programs.
National Institute for Drug Abuse Hotline:
1-800-662-4357. Provides information on preventing substance
abuse in the workplace.
The National Clearinghouse for Alcohol and Drug Information:
1-800-729-6686 toll-free. Provides pamphlets and resource
materials on substance abuse.
- U.S. Department of Labor (DOL)
Employment Standards Administration
200 Constitution Avenue, NW
The DOL offers publications on compliance with labor laws.
- U.S. Department of Treasury
P.O. Box 25866
Richmond, VA 23260
1-800-424-3676
The IRS offers information on tax requirements for small businesses.
- U.S. Environmental Protection Agency (EPA)
Small Business Ombudsman
401 M Street, SW (A-149C)
1-800-368-5888 except DC and VA
703-557-1938 in DC and VA
The EPA offers more than 100 publications designed to help small
businesses understand how they can comply with EPA regulations.
Page 89 of 96
- U.S. Food and Drug Administration (FDA)
FDA Center for Food Safety and Applied Nutrition
200 Charles Street, SW
The FDA offers information on packaging and labeling requirements
for food and food-related products.
A librarian can help you locate the specific information you need in
reference books. Most libraries have a variety of directories, indexes
and encyclopedias that cover many business topics. They also have
other resources, such as
- Trade association information
Ask the librarian to show you a directory of trade associations.
Associations provide a valuable network of resources to their
members through publications and services such as newsletters,
conferences and seminars.
- Books
Many guidebooks, textbooks and manuals on small business are
published annually. To find the names of books not in your local library
check "Books In Print", a directory of books currently available from
publishers.
- Magazine and newspaper articles
Business and professional magazines provide information that is more
current than that found in books and textbooks. There are a number of
indexes to help you find specific articles in periodicals.
In addition to books and magazines, many libraries offer free
workshops, lend skill-building tapes and have catalogues and
brochures describing continuing education opportunities.
Page 90 of 96
For more information on this subject, be sure to check out our website
at http://www.125aday.com for FREE REPORTS that will give you more
to consider in your decision making process!
Government and State Websites
United States government - http://www.firstgov.gov/
Individual state websites
Alabama – http://www.alabama.gov/
Alaska - http://www.state.ak.us/
Arizona – http://www.az.gov/webapp/portal/
California – http://www.ca.gov/state/portal/myca_homepage.jsp
Colorado - http://www.colorado.gov/
Connecticut – http://www.ct.gov/
Delaware – http://www.delaware.gov/
Florida – http://www.myflorida.com/
Georgia – http://www.georgia.gov/00/home/0,2125,4802,00.html
Hawaii – http://www.ehawaiigov.org/main/html/
Idaho – http://www.accessidaho.org/
Illinois – http://www.illinois.gov/
Indiana - http://www.state.in.us/
Iowa - http://www.state.ia.us/
Kansas - http://www.accesskansas.org/
Kentucky - www.ky.gov
Page 91 of 96
Louisiana – http://www.state.la.us/
Maine – http://www.state.me.us/
Maryland –
http://www.maryland.gov/communities/community.asp?UserID=2&Co
mmunityID=227&Folder=0
Michigan – http://www.michigan.gov/
Minnesota – http://www.governor.state.mn.us/
Mississippi – http://www.mississippi.gov/
Missouri – http://www.state.mo.us/
Montana – http://www.state.mt.us/
Nebraska – http://www.westnebr.net/govnmnt.html
Nevada – http://www.nv.gov/
New Hampshire – http://www.state.nh.us/
New Jersey – http://www.state.nj.us/
New Mexico – http://www.state.nm.us/
New York – http://www.state.ny.us/
North Carolina – http://www.ncgov.com/
North Dakota – http://discovernd.com/
Ohio – http://www.state.oh.us/
Oklahoma – http://www.youroklahoma.com/
Rhode Island – http://www.state.ri.us/
South Carolina http://www.myscgov.com/SCSGPortal/static/home_tem4.html
South Dakota – http://www.state.sd.us/
Page 92 of 96
Tennessee - http://www.state.tn.us/
Texas - http://www.state.tx.us/
Utah – http://www.utah.gov/main/index
Vermont – http://vermont.gov/
Page 93 of 96
Disclaimer and Limit of Liability
Use of the information provided here is subject to the following
parameters:
Restrictions On Use Of Material And Ownership
Material contained in this e-book may not be reproduced by anyone in
any manner for personal use or otherwise or for a use not in
accordance with 125aday.com's policies and procedures identified
herein and on the 125aday.com website.
Warranty With Regard To Material Representation &
Indemnification
125aday.com disclaims all warranties (express or implied) and material
is presented "as is." In no event shall 125aday.com, or any of its
suppliers, be liable for any direct, indirect, punitive, consequential or
incidental damage(s) of any kind resulting from use of this material or
materials purchased 125aday.com.
While the Company has made a concerted effort to present flawless
material, inaccuracies or typographical errors could occur. Changes may
be made by 125aday.com or its vendors at any time without prior
notice to its distribution affiliates or the general public. We make no
warranty that the service we provide will be uninterrupted, error-free or
100% secure. Therefore, under no circumstances shall the Company be
held liable for any damages that could result from any discontinuance,
modification, or suspension of service arising out of connection to, or
information available at, this material.
Information Pertaining To Safety Issues
Many of the E-Books contain various sections pertaining to safety issues
and equipment. This information is not intended to be all
encompassing. Anyone that uses the information provided in any EBook must become familiar with the various safety issues related to
operating a business and performing various acts in performing
services. The Company and affiliates can not be held liable or
responsible for any injury resulting whatsoever from the operation of a
business or performing any service or offering any product for sale.
Information Pertaining To Professional Advice
Page 94 of 96
Many of the E-Books contain various sections and references to
professional advice. It is not intended that this reference(s) should be
construed as giving any professional advice. Professional advice can
only be given by qualified individuals in the particular area, i.e. legal,
accounting and other areas. Anyone contemplating starting and/or
operating a business should seek any advice needed or required by a
professional before proceeding. The Company and its affiliates can not
be held responsible for failure to do so and the Company and its
affiliates are held harmless from anyone operating a business as
described in any E-Book.
Third-Party Materials And Linked Materials
The Company is not responsible for the content of those "third-party"
materials which are not directly related to 125aday.com, and not under
its control or auspices. Further, the Company makes no representations
regarding the content, products, services, advertising or other materials
available from "third-party" materials and is not responsible for the
legality, decency, copyright compliance, or accuracy of information
provided by those individuals/companies which have paid to be linked
to this material. Additionally, the Company will not be held liable for
damage or loss (caused or alleged to be caused) in connection with the
use of a "third party" material. Please be advised that when you use
affiliated services or third-party materials, you may be subject to
additional terms and conditions. As with a multitude of other web
materials, we ask that you exercise due diligence in browsing any
"outside" vendor page.
Copyright Notice
We ask that the users of this material respect our rights to our
intellectual property.
Copyright© 2003-2004 125aday.com, P.O Box 2432, Frisco, TX, USA
75034 All rights reserved.
Trademark Notice
The Company products referenced below are trademarks of
125aday.com. Other products (and company names) noted below are
trademarked by their owners. Use of them is expressly prohibited
without prior written permission from the owner.
125aday.com Trademarks
Other's Trademarks
Page 95 of 96
XIT, Inc. Copyright and Trademarks
Residual Rights
Rights not expressly granted in this document are reserved by
125aday.com
International Use
125aday.com currently operates, or permits operations, in the United
States. The Company invites people from other countries to enjoy this
material. 125aday.com plans to expand to other regions of the globe
and will issue the announcement at the appropriate time. Initiating
prohibited activity in a country where 125aday.com does not currently
operate could result in legal liability to the individuals involved and
interfere with 125aday.com's ultimate attempt to commence operations
in that country.
General Information
Relationship between a customer and 125aday.com, in conjunction with
the use of this material, is subject to and shall be governed by the laws
of the United States of America and the State of Texas. The failure of
the Company to enforce or exercise any of its rights noted above shall
not constitute a waiver of them.
Termination Of Rights
Material use is permitted until terminated by 125aday.com, notice of
which is not required. 125aday.com may deny access to the material
at any time for failure to comply with any of the provisions set forth in
this document or for any reason whatsoever.
Page 96 of 96

The Business Plan for Your Home Health Agency 125aday.com Publishing

Transcription

Similar documents

NeueNeue LL öö sungsanssungsans ää tzetze durchdurch Excel

here

MICROSOFT EXCEL Introduction to Microsoft Excel

Click Here - Excel Group of Institution

Ms. EL-Shahat - Elizabeth Blackwell Middle School 210Q / Homepage

How to make a cell flash in Excel

Introduction to Maptitude for MapPoint Users

Using VLOOKUP to return a picture Ken Puls, Microsoft MVP

Boyle`s and Charles`s Gas Law Virtual Lab

Document 6469350